Iberdrola S.A. (0.1%) (IBE) (IBE – $6.67/
€5.86 – Bolsas y Mercados Españoles)
headquartered in Bilbao, Spain, is one of the larger global power companies with operations primarily in Spain, Portugal, the UK, U.S., Mexico and Brazil. The company owns and operates ~44,600 MW of generation, including 14,200MW of renewables, and serves over ~20 million electric and gas customers. IBE’s strategy is focused on its renewable energy and regulated businesses in countries with high ratings, such as the U.S. On December 17, 2015, UIL Holdings of New Haven, Connecticut and Iberdrola USA combined to form a separate publicly traded utility called AVANGRID. Iberdrola owns 81.5% of AVANGRID and former UIL shareholders own 18.5%. The combination includes Iberdrola USA’s utilities (New York State Electric & Gas, Rochester Gas & Electric, and Central Maine Power) and UIL’s utilities (The United Illuminating Company, The Southern Connecticut Gas Company, The Connecticut Natural Gas Corporation, and The Berkshire Gas Company). The transaction was announced on February 25, 2015, and proposed a total value of $52.75 per share to UIL, a 25% premium to the previous close. The value represented a 21.1x P/E to UIL’s 2015 EPS guidance of $2.50 per share, and 11.2x EV/2014 EBITDA and 9.8x EV/2015E EBITDA. IBE targets earnings growth of ~6% annually from 2016-2020 and expects to invest over 17 billion euros (88% regulated or long-term contracted activities) during the same time period.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Utilities Fund first quarter 2016 commentary. Continue Reading »